Archive for the ‘New Statesman (Britain)’ Category

Writing in the May 24 2012 Irish Times Patrick Kinsella argues for rejection of the Austerity Treaty, finishing with this blunt warning for the Irish Labour Party in a coalition government with the ultra-conservative Fine Gael party:

On this issue, the Labour Party in Government has abandoned its traditional constituency, signing up to support the banks at the expense of equality, jobs and fair working conditions. It has abandoned the social pillar of the European Union in the interests of an illusory “stability”. I sense that its traditional constituency will abandon Labour at the next election

We recommend the full article, proving beyond any shadow of a doubt that the Fiscal Compact is a dangerous enemy to all shades of the left, including very moderate traditional social democracy.

A British New Statesman article entitled “The EU treaty is a disaster for the left” is just as compelling :

The author Owen Jones, whose “Chavs: the Demonization of the Working Class” is published by Verso says bluntly :

Consider this: as Paul Mason has written, “by enshrining in national and international law the need for balanced budgets and near-zero structural deficits, the eurozone has outlawed expansionary fiscal policy”.

Read that last bit carefully. Left-wing governments of all hues will, in effect, be banned by this treaty. If the French or the German left returns to power in the near future (and both are in a good position to do so), it will be illegal for them to respond to the global economic catastrophe with anything but austerity. An economic stimulus is forbidden – because the treaty has buried Keynesianism.

To date, Four Irish Trade Unions – MANDATE, UNITE, the TEEU (Electricians) and the Civil and Public Service Union (CPSU) have logically acted, understood the Treaty threat, and called for a NO in the referendum to be held on May 31.

Many activists know of people close to the Trade Union movement and Labour Party who know these arguments are 100 per cent true, but have not spoken their minds – they should broadcast now, reject the austerity policy of Tánaiste Éamon Gilmore and his government ministers, and join the NO Campaign.

They need look no further than Patrick Kinsella’s article :

Treaty is a social, political and economic threat

Thu, May 24, 2012

OPINION: Voting No is not a rejection of the EU – it is to oppose the erosion of social rights. It is to reject better treatment for banks over people, writes PATRICK KINSELLA

FOR NEARLY 40 years it has been pretty easy to find reasons to vote Yes to the succession of European treaties.

Like the rebel plotters in Monty Python’s Life of Brian asking “What has Rome ever done for us?”, we can answer that as well as better roads, we have more jobs, agricultural prosperity, quality education, cleaner water, and the promotion of equality and human rights, all benefits that might have seemed utopian back in the 1970s.

Yes, things are grim compared to a couple of years ago, and unemployment is at crisis levels. But total incomes, personal consumption and the number of people at work are all still higher than in 2003, which was not a bad year.

Free trade has been good to Ireland. But the European project is not just about free trade, and there are two compelling reasons to vote No to the latest treaty.

The first compelling reason is economic: the fiscal stability treaty does nothing to repair damage to our banking system, and nothing to reduce unemployment. The Government is locked in to an austerity policy that both theory and practice demonstrate to be wrong. It has been abandoned by the United States, by voters in Greece and France, and earlier this month by the voters of North Rhine Westphalia, Germany’s most populous state.

The policy problem is Angela Merkel’s obsession with reducing debt. She is wrong: running a national economy is emphatically not like running a household or a business – households and businesses do not control the money supply. Governments need to borrow to invest and central banks need a stock of government bonds as a means of managing interest rates.

Obviously, excessive borrowing will lead to inflation, but excessive saving will lead to deflation – more job losses and business closures – and that is what is happening across much of Europe now.

Voting No to the fiscal treaty will not reverse current economic policy – that’s a political issue that will be resolved only after the German federal election next year. But voting Yes would make the austerity permanent, writing into national law a requirement to cut budgets or raise taxes here for as long as general government debt is more than 60 per cent of gross domestic product.

It’s no good the Government talking about a growth agenda if it means only market liberalisation and further cuts in pay. European governments need to borrow more money and invest it in worthwhile projects if unemployment is to be brought down. And large-scale, long-term borrowing to invest would be legally banned under the fiscal treaty.

The second compelling reason to vote No is purely political. The treaty upsets the historic balance that lies at the heart of the European project – the balance between labour and capital. The EEC was founded partly to prevent another war between France and Germany. But free trade, and free movement of goods, services and money were always to be limited by the protection of social rights.

Europe built on Germany’s post-war “social market economy”, which provided stability, profits, low unemployment and a welfare state. The main trade unions and most social democrats have been enthusiastic supporters of a project that promised social justice as well as prosperity; a commitment to equality as well as the right to make profits.

The fiscal treaty, by what it says and what it does not say, ends that balance. For the countries that sign it, the needs of the banks will be permanently ahead of the needs of the people. There is no social chapter here: just cut the deficit and limit government borrowing, whatever the social cost.

What kind of Ireland, what kind of Europe do we want? Competitive and flexible? Yes, but surely not at the cost of permanently low wages, poor public services, high unemployment and social insecurity. This is not a fantasy nor scaremongering, it is already under way.

Just one example from my place of work: there’s no such thing as a “job” in a university anymore. The very best we can offer new recruits is a five-year contract. Not just in the State sector but throughout the economy, on issues of job security, employment conditions and pension provision, risk is being transferred from investors and employers to employees and the unemployed.

This turns the expectation of profit as a reward for taking risk on its head, and reverses the historic consensus on which European prosperity and social cohesion has been based – and all to protect the integrity of a banking system that failed in its primary duty of prudence in lending.

The single currency scheme was flawed from the start, because the euro member states were unwilling to surrender the sovereignty needed to sustain it. Unwilling to harmonise taxes and spending policy, unwilling to borrow money as a unit, unwilling to transfer resources from one region to another in the way the US federal government does, unwilling to tax and properly regulate the financial system.

Merely limiting states’ capacity to borrow does not address these issues, and does not provide any basis for currency stability. That’s a task to be tackled by the new French president and a new German chancellor.

The Government is rigorously following the policies required by the troika of intergovernment lenders who support our current spending deficit and our bank rescue, and voting No will not change that. But the political situation in Europe is changing radically, and it is absurd to think that our partners will leave us high and dry for future loans because we reject a legal straitjacket on future policy demanded in the dying days of the Merkel regime. And don’t think the ideological rebalancing demanded by the fiscal treaty is limited to the euro zone members: the final article says “steps will be taken” to incorporate the substance of it “into the legal framework of the European Union”.

The political context for the social market economy in the 1950s and 1960s was the spectre of communism that haunted Europe. The context now includes the indignados of Spain, riots in Greece, and right-wing parties. Those of us with no great wealth other than our education worry for our children: where will they work, how will they live?

On this issue, the Labour Party in Government has abandoned its traditional constituency, signing up to support the banks at the expense of equality, jobs and fair working conditions. It has abandoned the social pillar of the European Union in the interests of an illusory “stability”. I sense that its traditional constituency will abandon Labour at the next election.

In the meantime, those of us who think that on balance the European Union has been good for Ireland, and do not want to see that balance overturned, have compelling reasons to vote No to this treaty.

Patrick Kinsella is head of the school of communications at Dublin City University and is a member of the Tasc Economists’ Network